Cooper Indus., LLC v. Spectrum Brands, Inc.

• Decision Date: 12 September 2019
• Docket Number: Case No. 2:16 CV 39 CDP
• Citation: 412 F.Supp.3d 1082
• Parties: COOPER INDUSTRIES, LLC, Plaintiff, v. SPECTRUM BRANDS, INC., Defendant/Counter Plaintiff, v. Cooper Industries, LLC, et al., Counter Defendants.
• Court: U.S. District Court — Eastern District of Missouri

412 F.Supp.3d 1082

COOPER INDUSTRIES, LLC, Plaintiff,

v.SPECTRUM BRANDS, INC., Defendant/Counter Plaintiff,

v.Cooper Industries, LLC, et al., Counter Defendants.

Case No. 2:16 CV 39 CDP

United States District Court, E.D. Missouri, Northern Division.

Signed September 12, 2019

Jane Borthwick Story, Pro Hac Vice, Michael H. Ginsberg, Pro Hac Vice, Jones Day, Pittsburgh, PA, Todd C. Stanton, Evan M. Porter, Stanton Barton LLC, St. Louis, MO, for Plaintiff.

Andrew Harrison Perellis, Pro Hac Vice, Louis S. Chronowski, Jr., Patrick David Joyce, Seyfarth Shaw, LLP, Chicago, IL, Bart C. Sullivan, Sarah Beth Mangelsdorf, Fox Galvin, LLC, St. Louis, MO, for Defendant/Counter Plaintiff.

MEMORANDUM OPINION AND ORDER

CATHERINE D. PERRY, UNITED STATES DISTRICT JUDGE

This case presents competing claims for contribution and requires the Court to allocate responsibility for environmental remediation costs between two companies who are both former owners and operators of a small appliance manufacturing plant in Macon, Missouri. The plant used trichloroethylene (TCE) to degrease metal components used in appliances such as toasters and waffle irons

. I conclude that plaintiff/counterdefendant Cooper Industries, LLC is responsible for 4% of the clean up costs associated with the west side of the property and under the building's footprint, and defendant/counterplaintiff Spectrum Brands, Inc., is responsible for 96% of those costs.

The predecessor of plaintiff Cooper (McGraw Edison) sold several manufacturing plants to the predecessor of defendant Spectrum (Toastmaster)¹ under an Asset Purchase Agreement in 1980. The subject of this case is the plant located in Macon, Missouri. After the sale, environmental contamination from TCE was discovered at the Macon site and remediation efforts began.

Cooper and Spectrum assert contribution claims against each other under Section 113 of the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA).² These claims were tried to the Court during a four-day bench trial. The parties have submitted a joint stipulation of uncontested facts, post-trial briefs, proposed findings of fact, and proposed conclusions of law. After careful consideration of all relevant, admissible evidence under the appropriate standards, I determine that Cooper and Spectrum are both liable under CERCLA for the cleanup of the Macon Site, and I allocate responsibility for response costs associated with the west side of the property and under the building's footprint 4% to Cooper and 96% to Spectrum, for the reasons set out below.

Spectrum also requests that I reconsider my ruling granting Cooper's motion for judgment as a matter of law regarding its responsibility for contamination on the east side of the property. That motion was made orally by Cooper at the close of Spectrum's case on the second day of trial and was granted orally after argument from both sides. The motion, argument, and my ruling appear in Volume 2 of the Trial Transcript at pages 117 through 122, Doc. 208. The motion for reconsideration will be denied, as I continue to believe that Spectrum offered no evidence that the contamination on the east side of the property occurred before Cooper sold the property. Therefore, Spectrum is allocated 100% of the response costs associated with the east side of the property.

Findings of Fact

Ownership and Operations at the Macon Site

McGraw-Edison Company, through its Portable Appliance and Tool Group, manufactured small appliances at a plant located at 704 South Missouri Street, Macon, Missouri (hereinafter "Macon Site" or "Site") from approximately 1956 until approximately July 16, 1980. Annotated Joint Stipulation of Uncontested Facts ¶ 1, Doc. 214 (hereafter "Stipulation"). McGraw-Edison sold the Portable Appliance and Tool Group, including the Macon Site, via a July 16, 1980 Asset Purchase Agreement ("1980 APA") with Toastmaster Holding Company and Toastmaster Inc. (collectively "Toastmaster"). Stipulation ¶ 2, Doc. 214; 1980 APA (Deft.-A-21). Toastmaster was formed by senior managers of the Portable Appliance and Tool Group for purposes of this acquisition. Stipulation ¶ 3, Doc. 214. Cooper is the legal successor to McGraw-Edison. Stipulation ¶ 4, Doc. 214. Spectrum is the legal successor to Toastmaster. Stipulation ¶ 5, Doc. 214.³

Spectrum owned and/or operated the Macon Site from approximately July 16, 1980 through June of 2012. Stipulation ¶ 6, Doc. 214. Spectrum manufactured small appliances at the Macon Site from approximately July 16, 1980 until 2001. Stipulation ¶ 6, Doc. 214. Spectrum thereafter used the Macon Site for distribution and repair until 2012. Stipulation ¶ 6, Doc. 214. The Macon Site consists of approximately fifteen acres and is located in an area that is primarily light industrial or residential. Stipulation ¶ 7, Doc. 214. Structures at the Macon Site include an approximately 175,000 square-foot building and a metal canopy and shed adjacent to the west side of the building. Stipulation ¶ 8, Doc. 214.

TCE Use and Contamination at the Macon Site

Both Cooper and Spectrum used TCE for small appliance manufacturing operations at the Macon Site. Stipulation ¶ 9, Doc. 214.⁴ TCE was used at the Macon Site from at least 1971 to 2001. Trial Tr. Vol. 1 at 100:17-21 (Waller Cross), Doc. 207; Halterman Tr. 52:20-53:2, 57:25-58:3, Doc. 196-1. TCE is a non-flammable liquid chlorinated hydrocarbon used as an industrial solvent and degreaser. Stipulation ¶ 10, Doc. 214.

Two former Cooper and Spectrum employees who worked at the Macon Site testified live at trial. The first was Michael Waller, who worked at the Macon Site (first for Cooper then for Spectrum) from February 2, 1971 until 2008. Stipulation ¶ 82, Doc. 214; Trial Tr. Vol. 1 at 42:10-25 (Waller Direct), Doc. 207; Trial Tr. Vol. 1 at 91:22-92:1 (Waller Cross), Doc. 207. Mr. Waller held the title of Maintenance Foreman from 1976 until 1986. Stipulation ¶ 83, Doc. 214; Trial Tr. Vol. 1 at 45:6-8 (Waller Direct), Doc. 207. The second former Cooper/Spectrum employee who testified was Larry Clark, who worked first as the Group Safety Coordinator for Cooper from 1976 through 1980. Stipulation ¶ 86, Doc. 214; Trial Tr. Vol. 1 at 109:6-22, 113:19-21 (Clark Direct), Doc. 207. As environmental laws were enacted, he also assumed responsibility to oversee environmental compliance at Cooper's various Portable Appliance and Tool Group facilities. Stipulation ¶ 86, Doc. 214. Mr. Clark continued in this role from 1980 through 2006 for Spectrum. Stipulation ¶ 86, Doc. 214. Mr. Clark was based in Columbia, Missouri, and was responsible for facilities in in eight different locations in Missouri, Iowa, and North Carolina. Trial Tr. Vol. 1 at 112:23-113:12, 116:24-25 (Clark Direct). He was therefore spread out all over and was not at the Macon Site every day. Trial Tr. Vol. 1 at 194:24-195:8 (Clark Cross), Doc. 207.

Portions of David Halterman's deposition testimony were also read into the record by agreement of the parties as Mr. Halterman was unable to appear at trial. Mr. Halterman worked at the Macon Site for both Cooper and Spectrum from 1977 until 2009. Halterman Tr. 16:16-23, 27:5-20, 29:16-19, 30:14-15, Doc. 196-1. He was Assistant Plant Manager at the Site in 1977, became Operations Manager in 1980, and was later Vice President of Operations until 2000. Halterman Tr. at 16:21-23, 17:8-13, 27:5-8, Doc. 196-1. During his tenure, the Macon Site produced toaster ovens and toasters. Halterman Tr. at 36:1-4, Doc. 196-1. To make them, the raw materials would be processed into the various component parts, assembled on a production line, and then the parts were cleaned with TCE. Halterman Tr. at 36:16-37:4, 52:20-53:16, 27:5-8, Doc. 196-1. Eventually, vanishing oil was also used to clean parts, but it never completely replaced TCE. Halterman Tr. at 54:1-23, Doc. 196-1. Parts were sometimes cleaned with TCE using a batch degreaser and a monorail degreaser. Halterman Tr. at 56:1-57:14, 57:25-58:3, Doc. 196-1. The batch degreaser had heating coils, and large baskets of parts would be lowered into the degreaser where the TCE vapor would dissipate the oil on the parts. Halterman Tr. at 58:4-10, Doc. 196-1. The basket was then left over the batch degreaser to allow the parts to dry before they were removed. Halterman Tr. at 108:25-109:6, Doc. 196-1. The monorail degreaser was a conveyor which moved larger parts through a degreaser, where they would be treated with TCE and come out clean. Halterman Tr. at 60:20-61:3, Doc. 196-1. The parts were semi-dry when they emerged, and Mr. Halterman did not recall any TCE dripping off the parts onto the floor. Halterman Tr. at 105:21-106:1, Doc. 196-1. As with the batch degreaser, the parts were left on the conveyor to allow them to fully dry before they were removed. Halterman Tr. at 109:9-12, Doc. 196-1. Mr. Halterman never witnessed any TCE spilling onto the floor. Halterman Tr. at 105:24-106:11, Doc. 196-1. He believed that maintenance and tool room people may have, at one time, cleaned their hands with TCE at the Macon Site. Halterman Tr. at 103:8-13, Doc. 196-1.⁵

Originally, new TCE was stored at the Macon Site in a 5,000-gallon aboveground storage tank ("AST") located outside, directly adjacent to the west of the facility building. Trial Tr. Vol. 1 at 48:20-49:1 (Waller Direct), Doc. 207. The AST sat on a pedestal that was within a containment area surrounded by a two-and-a-half to three-foot cement wall. Trial Tr. Vol. 1 at 53:18-21 (Waller Direct), Doc. 207. Mr. Waller testified that the floor of the containment area was originally dirt, but was changed to cement in the latter part of the 1970s. Tr. Vol. 1 at 62:24-63:13, 68:17-21 (Waller Direct), Doc. 207. However, the bottom of the pedestal or platform where the TCE AST sat was sand or gravel; there was no cement underneath the AST. Tr. Vol. 1 at 170:3-12 (Clark Cross), Doc. 207. The AST was filled with TCE by delivery tankers via...